As someone in the vehicle and technology industry, witnessing the current trends, Volkswagen’s contemplation of closing three plants in Germany is a clear signal that there’s no return to the old era of super profits for European and Western automakers. The industry is changing rapidly, and the dominance they once enjoyed is slipping away.

When you take a closer look at China’s massive production capacity and the speed and scale of its innovation in the automobile sector, it’s clear that many Western car companies won’t survive this technological revolution. The pressure is nearly unbearable for them. In sight, it’s capitulation and retreat everywhere.

China has drastically reduced prices—from $250,000 in 2008 to $20,000 in 2024. That’s a staggering 92% reduction in just 16 years—something unprecedented in the industry.

Meanwhile, Europe’s automobile sector faces additional challenges due to the European Union’s imposition of high tariffs on China’s cutting-edge technologies. Companies like Volkswagen and Mercedes-Benz have opposed these tariffs, but Chinese consumers are already shifting away from European brands, opting for Chinese vehicles with superior technology instead.

The failure of this strategy in Europe is obvious. After European brands were pushed out of China, they will soon be pushed out of much of the global south, as Chinese manufacturers continue to dominate with their low-cost, high-tech vehicles. The U.S. is next in line, with Chinese companies gaining ground in Mexico and the Americans clinging to the hope that 100% tariffs will save them. But without access to global markets, that hope is fading fast.

What’s their strategy?

Why not just compete?

Ooh…the answer is super profits, they are accustomed to obscene profits. An era that has almost come to an end.